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Article
Publication date: 23 July 2020

Tolulope Temilola Osinubi and Philip Akanni Olomola

The study examines the dynamic relationship among globalisation, income inequality and poverty in Mexico, Indonesia, Nigeria and Turkey (MINT countries) between 1980 and 2018.

Abstract

Purpose

The study examines the dynamic relationship among globalisation, income inequality and poverty in Mexico, Indonesia, Nigeria and Turkey (MINT countries) between 1980 and 2018.

Design/methodology/approach

A Bayesian vector autoregressive (BVAR) approach is used as a technique of estimation hanging on the fact that the method uses prior distribution for the estimated parameters.

Findings

The results show that globalisation is a strong predictor of itself in all the MINT countries only in the short run. In the long run, income inequality and poverty strongly influence globalisation, respectively, in Indonesia and Turkey, while globalisation still has more impact on itself in Nigeria. Income inequality has a strong endogenous impact on itself in Mexico and Indonesia over the time horizon, whereas globalisation and poverty are strong predictors of income inequality in the long run in Nigeria and Turkey, respectively. Also, poverty strongly influences itself in all the MINT countries in all the periods, meaning that poverty begets itself in all the MINT countries, except for Indonesia in the long run.

Practical implications

The study suggests that all the MINT countries should ensure political stability and a strong institutional framework to gain from the process of globalisation and to experience reductions in the levels of income inequality and poverty.

Originality/value

This study is distinct from other studies in the sense that an overall globalisation index (GBI) as used by Dreher et al. (2008) is used for the globalisation variable, and the Multidimensional Poverty Index (MPI) is used to capture poverty in all the MINT countries. Also, the research paper uses a BVAR approach as against the classical VAR, and this helps in solving over-fitting problems.

Details

Journal of Economic and Administrative Sciences, vol. 37 no. 2
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 29 October 2020

Opeoluwa Adeniyi Adeosun, Philip Akanni Olomola, Adebayo Adedokun and Olumide Steven Ayodele

The increasing debate on the viability of broad-based productive employment in stimulating the participatory tendencies of growth makes it instructive to inquire how the…

Abstract

Purpose

The increasing debate on the viability of broad-based productive employment in stimulating the participatory tendencies of growth makes it instructive to inquire how the African “Big Five” have fared in their quests to ensure growth inclusiveness through public investment-led fiscal policy.

Design/methodology/approach

Time varying structures and nonlinearities in the government investment series are captured through the non-linear autoregressive distributed lag, asymmetric impulse responses and variance decomposition estimation techniques.

Findings

Study findings show that positive investment shocks stimulate growth inclusiveness by enabling access to opportunities through job creation and productive employment for the populace; this result is evident for Morocco and Algeria. However, there is a non-negligible evidence that shocks due to decline in the government investment manifest in insufficient capital stocks and limited investment opportunities, impede access to opportunities by the populace, hinder labour employability and make growth less inclusive. Furthermore, all short-run findings corroborate long-run results regarding the reaction of inclusive growth to positive investment shocks with the exclusion of South Africa; which, unlike its long-run finding, shows that shocks due to increases in investment can foster growth inclusiveness. Also, in respect to short-run negative investment shocks, Nigeria is the only country that does not align its long-run findings.

Practical implications

That public investment shocks make or mar inclusive growth effectiveness shows the need for appropriate fiscal policy consolidation and automatic stabilization guidelines to ensure buffers against shocks and to enhance government investment generation efficiency for a sustainable inclusive growth process that is more participatory in Africa.

Originality/value

This study is the first to accommodate possibilities of shocks in the inclusivity of growth analysis for the five biggest African economies which jointly account for over half of the recorded growth in the continent. As such, there is quantitative evidence that government investment is a potent determinant of growth inclusiveness and it is susceptible to structural changes and time variation of shocks.

Details

International Journal of Social Economics, vol. 47 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

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